Allegations
(a) New Oriental’s revenue and operational growth was the result of deceptive marketing tactics and abusive business practices that flouted Chinese regulations and policies and exposed the Company to an extreme risk that more draconian measures would be imposed on the Company; (b) New Oriental had engaged in misleading and fraudulent advertising practices, including the provision of false and misleading discount Information designed to obfuscate the true cost of the Company’s programs to its customers; (c) New Oriental had falsified teacher qualifications and experience in order to attract customers and increase student enrollments; (d) New Oriental had defied prior government warnings against linking school enrollments with the provision of private tutoring services; (e) as a result of the foregoing, New Oriental was subject to an extreme undisclosed risk of adverse enforcement actions, regulatory fines and penalties, and the imposition of new rules and regulations adverse to the Company’s business and interests; and (f) as a result of the foregoing, defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and lacked a reasonable, factual basis.